Ask Matt: Is Fitbit Apple’s latest victim?
Q: Is Fitbit Apple’s latest victim?
A: Smartphone, video game, camera and navigation gear companies aren’t the only ones sweating over Apple’s (AAPL) market dominance. Add Fitbit (FIT) to the list.
The pioneer in wearable fitness trackers has seen its stock and outlook dim ever since Apple launched its own product as well.
Fitbit, which was a market innovator as it was founded in 2007, has seen its stock drop in half since it first started trading last June. Apple released its competing product in April 2015.
Investors worry the company will have a tough time maintaining its market leadership given many tech giants are interested in wearables. That doesn’t just include Apple, but also Samsung, Microsoft (MSFT), Asus, Garmin (GRMN) and LG.
Shares of Fitbit tumbled 19% Thursday and was down another 2.4% in Friday trading to $13.55 despite reporting better-than-expected profit of 10 cents a share and forecast-beating revenue of $505 million.
Analysts think Fitbit’s revenue will rise 38% this year and 17% in 2017. But keeping ahead of the competition will cost more.
Fitbit said it will make up to 11 cents a share in the second quarter, which is 59% less than analysts expected a month ago. Fitbit says it will need to invest heavily in research to make sure it stays a step ahead.
Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.
